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8. Consider the following demand schedule. Does it apply to a perfectly competitive firm? Compute marginal and average revenue. Price Quantity Price Quantity $95 2 $55 $88 3 $40 $80 4 $22 7

8. Consider the following demand schedule. Does it apply to a perfectly competitive firm? Compute marginal and average revenue. Price Quantity Price Quantity $95 2 $55 $88 3 $40 $80 4 $22 7

Principles of Economics 2e
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter9: Monopoly
Section: Chapter Questions
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8. Consider the following demand schedule. Does it apply to a perfectly competitive firm? Compute marginal and Average Revenue

Bb Upload Assi X I VitalSource C Solved: Cons x = Kareem Dav x My Class Sc X My Question × + A bookshelf.vitalsource.com/#/books/9781305464841/cfi/592!/4/4@0.00:0.683 Chapter 25 Monopoly 559 Table of Contents 3. Why is it necessary for the seller to be able to keep customers from reselling the product in order for price discrimination to occur? There are many products for which you get a discount for purchasing large quanti- ties. For instance, most liquor stores will provide a dis- count on wine if you purchase a case. Is this price discrimination? If so, what is to keep one customer from purchasing cases of wine and then reselling single bottles at a price above the case price but below the liquor store's single-bottle price? 4. Many people have claimed that there is no good for which substitutes are not available. If so, does this mean there is no such thing as monopoly? 5. Suppose that at a price of $6 per unit, quantity demanded is 12 units. Calculate the quantity demanded when the marginal revenue is $6 per unit. (Hint: The price elasticity of demand is unity at the midpoint of the demand curve.) 6. In the following figure, if the monopoly firm faces ATC1, which rectangle measures total profit? If the mononoly firm faces A TC. what ie total nroft? What illegal. What conditions are necessary for this pricing scheme to be profitable to the U.S. companies? 8. Consider the following demand schedule. Does it apply to a perfectly competitive firm? Compute marginal and average revenue. Price Quantity Price Quantity $95 $55 $88 3 $40 6 $80 4 $22 7 9. Suppose the marginal cost of producing the good in question 8 is a constant $10 per unit of output. What quantity of output will the firm produce? 10. Do you agree or disagree with this statement: “A monopoly firm will charge an exorbitant price for its product"? Explain your answer. 11. Do you agree or disagree with this statement: “A monopoly f than a perfect 12. State colleges a We've updated our read aloud feature! Give it a try here. 1 口。 6 Aa 26 559
Transcribed Image Text:Bb Upload Assi X I VitalSource C Solved: Cons x = Kareem Dav x My Class Sc X My Question × + A bookshelf.vitalsource.com/#/books/9781305464841/cfi/592!/4/4@0.00:0.683 Chapter 25 Monopoly 559 Table of Contents 3. Why is it necessary for the seller to be able to keep customers from reselling the product in order for price discrimination to occur? There are many products for which you get a discount for purchasing large quanti- ties. For instance, most liquor stores will provide a dis- count on wine if you purchase a case. Is this price discrimination? If so, what is to keep one customer from purchasing cases of wine and then reselling single bottles at a price above the case price but below the liquor store's single-bottle price? 4. Many people have claimed that there is no good for which substitutes are not available. If so, does this mean there is no such thing as monopoly? 5. Suppose that at a price of $6 per unit, quantity demanded is 12 units. Calculate the quantity demanded when the marginal revenue is $6 per unit. (Hint: The price elasticity of demand is unity at the midpoint of the demand curve.) 6. In the following figure, if the monopoly firm faces ATC1, which rectangle measures total profit? If the mononoly firm faces A TC. what ie total nroft? What illegal. What conditions are necessary for this pricing scheme to be profitable to the U.S. companies? 8. Consider the following demand schedule. Does it apply to a perfectly competitive firm? Compute marginal and average revenue. Price Quantity Price Quantity $95 $55 $88 3 $40 6 $80 4 $22 7 9. Suppose the marginal cost of producing the good in question 8 is a constant $10 per unit of output. What quantity of output will the firm produce? 10. Do you agree or disagree with this statement: “A monopoly firm will charge an exorbitant price for its product"? Explain your answer. 11. Do you agree or disagree with this statement: “A monopoly f than a perfect 12. State colleges a We've updated our read aloud feature! Give it a try here. 1 口。 6 Aa 26 559
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